Which Top 5 S&P 500 Performer Has the Best Shot at Outperforming in Q2

With investors enjoying a rare three-day weekend thanks to Good Friday, and basking in a fresh all-time closing high for the S&P 500, I thought it important to take the time to review the index's top five performers in the first-quarter to see if they offer any clues as to which may roll its gains into the second quarter.

Netflix+ 104.4% Netflix was the best performer within the S&P 500 by a mile. Netflix more than doubled up for shareholders after showing the benefits of content streaming, both domestically, and abroad. Despite seeing a continued slowdown in its traditional DVD business, Netflix added 2 million streaming customers domestically, and an additional 1.8 million abroad. Furthermore, streaming gross margin came in higher than anyone had expected, resulting in a $0.13 fourth-quarter profit, when Wall Street had been anticipating a $0.13 loss per share.

Best Buy+ 88.4% (dividend-adjusted) Big-box retailer Best Buy turned in a phenomenal performance in the first-quarter for a company that many had left for dead. Best Buy's turnaround strategy - which involves downsizing its stores, focusing on mobile products like smartphones and tablets, incentivizing its employees with sales bonuses and, most importantly, matching competitor's prices -- appears to be working like a charm. The company left its dividend untouched at $0.17 per quarter, and reversed a string of same-store sales declines by posting a 0.9% same-store sales increase over the year-ago period.

Hewlett-Packard+ 68.4% (dividend-adjusted) Like Best Buy, HP was left for dead by shareholders at the beginning of the year after unveiling sweeping reforms and job cut plans last year. However, HP put some of those dissenters on the back burner after reporting better-than-expected first-quarter earnings in February. HP's revenue of $28.4 billion, and its EPS forecast for 2013 of $2.30-$2.50, was markedly higher than the $27.8 billion that the Street had expected, and the $2.10-$2.30 that HP's management had previous projected.

H&R Block+ 59.5% (dividend-adjusted) Tax preparation service H&R Block delivered a nearly 60% gain in the first-quarter to shareholders despite just weeks ago running into a snafu with its at-home tax preparation software that modestly delayed up to 660,000 returns. H&R Block, which derives nearly all of its profits between the end of January and April 15, anticipates filings will be up by 1%-2% this year, and CEO Bill Cobb noted three weeks ago that he felt H&R Block was outperforming its competitors.

Micron Technology+ 57.3% Memory chip maker Micron snagged the fifth-best performance within the S&P 500 this quarter in anticipation of stronger margins and decreasing costs, which should help its bottom line performance. Handily topping Wall Street's revenue expectations in its second-quarter results, Micron has benefited from robust smartphone and tablet sales, as well as demand for data center infrastructure.

Source: Finviz, Yahoo! Finance.

Which of these five can head higher in Q2?It really is a tough choice deciding which of these names could have the most to gain in the second quarter considering how far they've already come; but I've concluded that Best Buy offers investors the greatest chance for a continuation move.

Micron is easy to eliminate because it's in a highly cyclical sector. It's the type of stock that you buy when the fundamentals are horrible, and no one wants them. When margins begin to improve, costs fall, and analysts start to upgrade -- that's your cue to exit, stage left!

H&R Block was easy to eliminate, because its legacy bricks-and-mortar stores are dragging down its results with slow growth, and its tax software glitch likely ruined its public image for yet another year. With little chance to gain ground on TurboTax or TaxAct, H&R Block is an easy avoid.

HP delivered better-than-expected results in its first-quarter, but it's also in what I'd call the third-inning of a nine-inning restructuring game. HP still has thousands of layoffs yet to come, billions in costs to shave off its expenses, and CEO Meg Whitman isn't exactly the revolutionary leader I look to who will enact these changes ahead of schedule.

Netflix is much tougher to eliminate given the strength behind its streaming results. But, on a valuation basis, I have a hard time believing that Netflix will be able to maintain a forward P/E of 63. Netflix's DVD business, which is a considerably higher margin model, is still deteriorating, which really limits further upside, as margins contract with the company focusing on streaming content.

That leaves Best Buy which has wowed Wall Street with its price-matching strategy aimed squarely at stopping showrooming in its tracks. Furthermore, the effects of Amazon.com being forced to collect sales tax in an increasing number of states can't be understated. Amazon is beginning to lose its comparative pricing advantage, which could play into Best Buy's hand from both an in-store convenience factor, and also in terms of boosting its own direct-to-consumer business. At less than 10 times forward earnings and with a 3% yield, Best Buy can still offer value to investors.

Is this turnaround plan sustainable?The brick-and-mortar versus e-commerce battle wages on, with Best Buy caught in the middle. After what might have been its most tumultuous year in history, there are now even more unanswered questions about the future for the big-box electronics retailer. How will new leadership perform? Will old leadership take the company private? Will a smaller store format work out for both the company and its brave investors? Should you be one such brave investor? To help answer all these questions, The Motley Fool has released a new premium research report detailing the opportunities -- and the risks -- in store for Best Buy. Simply click here now to claim your comprehensive report today.